Case 18 ISSUE:
OKS DESIGNTECH, INC. v. MARY JAYNE L. CACCAM Whether the CA erred in ruling that the NLRC gravely abused its discretion
G.R. No. 211263, 5 August 2015, First Division (Perlas-Bernabe, J.)
FACTS:
Petitioner, OKS DesignTech, Inc. (DesignTech), hired respondent, Mary
Jayne Caccam (Caccam) as an accountant under a contract of employment for a
fixed period. A few days before the expiration of her contract after a year in service,
Caccam received a letter signed by the company manager informing the status of
her contract. As a result, Caccam filed a complaint for illegal dismissal by virtue of
the aforesaid letter. She further claimed that she was a regular employee as the
nature of her work was necessary and desirable in the usual business of
DesignTech. And she was merely imposed a fixed-term employment with an
understanding that her contract would just be renewed upon its expiration. On the
other hand, DesignTech argued that Caccam’s complaint was a retaliation to the
criminal complaint for Qualified Theft and Falsification of Private Documents that
was filed against the latter after having discovered several unauthorized
withdrawals amounting to P500,000.00 from its bank. They also added that the
letter was not actually a termination letter but a mere notice of the expiration of
her employment contract.
The Labor Arbiter (LA) held that Caccam was illegally dismissed and she
attained the status of a regular employee who may be dismissed only for just or
authorized cause. The LA further held that even with the pending criminal case
against Caccam, there was no substantial evidence to support DesignTech’s claim of
loss of trust and confidence, noting that it was not part of the former’s duty to
withdraw money from the company's depository bank, and that the questioned
check transactions were all authorized and signed by the manager.
On the other hand, the National Labor Relations Commission (NLRC)
posited that even if Caccam’s work was necessary and desirable in the usual trade
or business of DesignTech, and the fact that the period of her employment
extended for more than one year were not decisive indicators for regularity of
employment in a fixed period employment. It further held that in such kind of
employment, no prior notice of termination was required to comply with the due
process requirement.
On appeal, the Court of Appeals set aside NLRC’s decision and concurred
with the LA. The terms and conditions of the first contract and the second contract
negated a fixed-term employment since they state that respondent's employment
may be terminated prior to the expiration thereof for "just or authorized cause or
when the employee fails to meet the reasonable standards made known to him by
the employer." Hence, it concluded that respondent was a regular employee who
had been illegally dismissed.
in finding that respondent was not a regular employee and as such, validly
dismissed due to the expiration of her fixed-term contract
RULING:
Yes.
The Court finds that the CA committed reversible error in granting
respondent's certiorari petition since the NLRC did not gravely abuse its discretion
in ruling that respondent was legally dismissed.
An examination of the contracts entered into by respondent reveals that
her employment was clearly limited to a fixed period and did not go beyond such
period. She, however, asserted that she is deemed a regular employee in view of
the nature of her employment as an accountant, an activity that is necessary and
desirable in the usual business or trade of the company. This notwithstanding, case
law dictates that even if an employee is engaged to perform activities that are
necessary or desirable in the usual trade or business of the employer, the same
does not preclude the fixing of employment for a definite period.
In fact, the Court, in Brent, had already pronounced that the decisive
determinant in fixed-term employment should not be the activities that the
employee is called upon to perform, but the day certain agreed upon by the parties
for the commencement and termination of their employment relationship.
In Mercado v. AMA Computer College-Parañaque City, Inc., the Court
delineated the foundational difference between probationary and fixed-term
employment contracts, to the latter this case clearly falls: The fixed-term character
of employment essentially refers to the period agreed upon between the employer
and the employee; employment exists only for the duration of the term and ends
on its own when the term expires. While employment on probationary status also
refers to a period because of the technical meaning "probation" carries in Philippine
labor law - a maximum period of six months, or in the academe, a period of three
years.
The Court therefore upholds the NLRC's finding that respondent was a
fixed-term employee and not a regular one whose employment may be validly
terminated upon the expiration of her contract. To reiterate, contracts of
employment for a fixed period are not per se unlawful. What is objectionable is the
practice of some unscrupulous employers who try to circumvent the law protecting
the workers from the capricious termination of employment
In fine, having been hired under a valid fixed-period employment contract,
respondent's employment was lawfully terminated upon its expiration on June 21,
2009 without need of any further notice. Hence, the CA erred in ascribing grave
abuse of discretion on the part of the NLRC which, in fact, correctly found
respondent not to have been illegally dismissed.
Petition granted.